What is the Lean methodology?

What is a Lean Methodology? It is a business management philosophy that focuses on maximizing customer value while minimizing waste. It originated in the Toyota Production System (TPS) and has since been adopted by various industries. Whether used in manufacturing, health care, or any other industry, it is a concept where a business attempts to create a flow of value to the customer through specific concepts.  Most people associate Lean with waste elimination, and that is a big result, but the real goal behind Lean is to provide your customers with the value they need as efficiently as possible.  It also provides a powerful framework for organizations to improve the ongoing process of incremental adjustment to significantly speed up product delivery by efficiently managing resources and effort, which helps teams work more smoothly and effectively.

History of Lean Methodology

The lean methodology traces its roots back to Toyota in the 1930s and 1940s. Japanese engineers Shigeo Shingo and Taiichi Ohno wanted to eliminate unnecessary steps in production by simplifying processes to the bare minimum. This approach aka "lean," helped Toyota cut costs and maintain high profits, even when they were still a kid in the automobile industry.

In 1936, Toyota was commissioned by the government to make a series of trucks. Facing challenges during the production of these vehicles, the company introduced problem-solving methods influenced by the idea of Kaizen (continuous improvement). This approach to improving processes gradually became the central guiding principle of Toyota's manufacturing. Referred to as the Toyota Production System or TPS (later renamed "The Toyota Way" in 2001), this revolutionary management system established the foundation for lean management, lean thinking, and lean methodology.

After World War II in Japan, cutting costs through mass production and the creation of economies of scale became more complex. Taiichi Ohno realized the importance of aligning production with actual sales rather than predetermined targets. This shift from pushing products to pulling them based on demand reduced overproduction and became a fundamental component of lean manufacturing.

While the concepts of lean methodology were being employed in manufacturing by the late 1930s, the term "lean" had not yet been introduced. It wasn't until 1988 that John Krafcik first used the term in an article titled "Triumph of the Lean Production System."

Pillars of Lean Methodology

The two main pillars of Lean are continuous improvement and value stream. When applied well, these principles help organizations make better decisions which results in healthier and more efficient work systems.

• Continuous Improvement

  One of the core concepts underlying Lean methodology is the idea of continuous improvement. This is a never-ending goal of making improvements to the way things in the business are done. These improvements may be major changes to the way a process is completed, or they may be small adjustments that cut out wasted effort. Either way, the company must be focused on finding all potential problems and eliminating them from the process.

• Value Stream 

  Another core concept used in Lean is the idea of a value stream. This is the representation of how value is added to a product or service, and how it flows toward the customer. One of the main things to note about a value stream is that the value always must be from the perspective of the customers. If they aren’t willing to pay for a specific addition to a product or service, then it is not adding value and should be considered waste.

Principles of Lean methodology

The key pillars of continuous improvement and valuing everyone in the organization can be summarized into five main elements, which function as guiding principles of a lean system.

Value Analysis 

The core idea of lean methodology is to remove waste from the workflow, which means getting rid of things that don’t contribute to the work process. Anything that slows down things is seen as waste, and anything that helps customers is considered valuable. This includes not just meeting customer needs directly, but also operations that improve customer satisfaction, like quality checks and customer support.

Value Stream Mapping 

After figuring out what value your team provides to customers, the next step is to use a visual tool from lean management to map out the process for your customers. A common tool for this is called a Kanban board, which shows all the steps a product or project goes through from start to finish.

Improve Workflow Efficiency 

When using the lean approach, the goal is to have a steady work process that wastes as little resources and time as possible. This way, you can provide the customer with the product on time. To do this, you need to find and address any problems that slow down the product development process. 

Pull System

A "pull system" means that new work is only started when there is a customer demand. Instead of constantly giving new work to team members who are already busy, the tasks are held back until the team members have completed their current work and are ready for more. This lean method prevents overproduction, shortening cycle time, and speeds up the time it takes to complete a task.

Continuous Improvement

The most important idea in lean thinking is the constant search for better ways to serve customers. Lean organizations always look for ways to improve, making sure every part of their work creates more value for the customer. This means regularly checking performance, aiming for perfection, and involving all team members in the improvement process. There are various methods to continuously assess and improve processes, such as Lean Six Sigma, analyzing the root cause of problems, and the "Plan, Do, Check, Act" cycle. These techniques identify and eliminate waste and over-processing.

Benefits of Lean Methodology

Lean methodology helps businesses improve efficiency, product or service quality, and customer satisfaction while reducing expenditure of resources and lead time. The benefits of implementing this philosophy are many, here are just 5 of the key benefits of implementing Lean. 

Customer Satisfaction

Lean management is all about putting the customer's opinion first. As you continue to deliver high-quality results, clients will grow to trust and rely on your work. This is crucial for keeping your customers happy, building a great reputation, and contributing to more growth. These improved processes also make sure organizations can quickly adjust to shifting market and customer demands with optimized resource allocation. 

Improved Productivity and Efficiency

Organizations can become more efficient and productive by carefully managing their workflows, cutting out unnecessary tasks, and making the best use of their resources. Getting rid of the 8 wastes in Lean methodology (TIMWOODS) can also lower costs and improve efficiency. Using techniques that prevent mistakes and creating standard steps for tasks can make the work process go smoothly from start to finish.

Shorter Lead Time

With less waste in the system, companies can greatly reduce lead time, which lets them make improvements and adjustments faster. Teams can apply Lean Management tools like Kanban and Value Stream Mapping to easily spot and address project delays to keep improving their processes. They will also have ways to effectively solve problems, quickly identify any issues, share solutions, and put those solutions into action.

Employee Engagement

Lean management places a strong emphasis on both continuous improvement and respect for people. When companies create an environment that encourages problem-solving, ongoing learning, and autonomy, employees tend to be more engaged and satisfied. Using lean management to align different levels of the organization and break down barriers between departments, enterprises can promote innovation and inspire workers to contribute to larger company-wide goals.

Competitive Edge

After effectively implementing Lean management principles and techniques, businesses can build a strong foundation for continuous improvement and operational excellence. By constantly finding and getting rid of waste, gradually improving efficiency, and staying flexible to give customers the most value, businesses with Lean Management as part of their culture are set to become and remain industry leaders.

End Goal of Lean

In the end, the Lean methodology should lead to a dramatic reduction of all forms of waste and an improved value provided to the customer. This will, if done properly, increase the profit margin for the company and help them to become more successful over time. This methodology has been proven to be effective in thousands of companies over the past several decades, and thanks to the fact that it is adaptable by its core nature, it will continue to benefit businesses long into the future.